Five Important Steps to Buying Your First Home

With the First Time Home Buyer Tax Credit extended, more and more people are looking to buy a home right now. However, owning a home is not something you want to rush into, and you need to know what you're getting into and how to approach it in order to make a responsible decision.

The key to the entire process is to ask questions. Lots and lots of questions. And, there is NO STUPID QUESTION.

Here are 5 important steps to buying your first home:

1. Get your Finances in order - Check your credit score, taxes and all other aspects of your finances to figure out the max you can afford with monthly mortgages, utilities, taxes, maintenance and insurance. A bad credit score can affect what rates you sign on a mortgage...or prevent you from getting one altogether.

It helps to go ahead and get pre-approved by a lender. That lets the seller know financing is already lined up.

2. Find a Realtor and start looking - Often the best way to choose a realtor is through a referral from a friend or family member. Make sure they have experience with the area you're interested in and are good negotiators. Make a list of pros and cons of things you must have in a house and prioritize it. Consider location and convenience to church or shopping or schools.

3. Investigate the reputations of builders & condos - Check out their financial health and get info from the Better Business Bureau.

4. Make an offer and apply for a mortgage - Buyers are generally in the driver's seat these days. Have enough cash for a down payment, which can be a minimum of 10% and extra funds for closing costs, sppraisals and move-in deposit. Definitely do an inspection.

5. Prepare for closing - Secure homeowners insurance. Have a financing contingency to get you out of your contract without penalty if your loan doesn't go through. Have certified funds ready, a cashier's check instead of a regular check.

Buying a home is a wonderful milestone, but also a big responsibility. Do your research and prepare in advance. Most our clients are going through this process and cleaning up their credit in advance. United Credit Source wants to help you through the important times in your life and prepare you for your future!

5 key steps to buying your first home, tax credit or no.

The Ingredients of a FICO Score

FICO is an independent company from the 3 credit bureaus, TransUnion, Experian & Equifax.

They developed the algorithm that 90% of the largest banks in the United States use.

Your FICO score is used to determin mortgage rates, car rates and credit car terms.

The FICO credit scores range from 350-850. Scores below 600 are considered high risk borrowers. 690 and above is considered excellent. How are the scores decided? They are based on your payment history, outstanding debts, credit history, new credit & credit in use on your credit report.

Here's how it's broken down:

35% of your score is calculated from your payment history. Paying on time makes a big difference!

30% is based on the amount of debt your carrying currently. Paying balances down can make a big difference!

15% is based on the length of your payment history. The longer you've been around, the better. If you're new, you can be risky.

10% is based on any recent inquiries. Don't go around having your credit pulled by every auto dealer, credit card company out there. It adds up.

10% is based on your credit mix variation. It's good to have different kinds of credit, such a credit card, a car payment and a student loan.

Now, we still don't know FICO's secret algorithm, but we have an idea of the ingredients.

Pay attention to all aspects of your credit.

Pull a consumer credit report regularly without any affect to your scores,

and United Credit Source can help you clean up any inaccurate or deliquent info on your credit report.

Take control of your financial future!

Budgeting on an Irregular Income

Creating a Budget when you have an irregular income can be intimidating, but you still need to do it. You'll feel so much better about your finances if you take the time to plan things out and take control of what you can.

First you need to figure out exactly how much money you need each month to get by. The basics. This includes food, utilities, your home and transportation. This does not include entertainment and extras.

Then you need to list items in order of importance. The most important first, the next important, and so forth. Dave Ramsey, the financial guru, has several budgeting forms you can download for free to help with this process.

When you receive your paycheck, spread this money out through your budget, starting with the first item and working your way down the list. It may not cover everything, but just try to pay as much as possible. Then, when your next paycheck arrives, continue on the list from where you left off, paying bills.

It might take a little trial and error to figure it out and make it work well, but it's worth figuring it out and taking control of your finances. United Credit Source wants to help you achieve financial control. We'll help you figure out which debt to pay down, how to take control of your credit scores and clean up those negative, inaccurate accounts on your credit report. We will educate you so that you won't find yourself trapped by your finances.

Twitter Tracking

It's a unique method of tracking your purchases.

Debit cards and credit cards report in monthly statements what you've spent your money on.

Cash you can only keep track of if you save all your receipts...and that can be a pain and much more difficult than it sounds.

Introducing Twitter. And Text Messaging.

For those of you out there with smart phones, this is easy as pie. After making a purchase with cash only, send yourself a direct message over Twitter to make a record of the transaction. Or send yourself a text message. It's quick, it's easy, it's private, and later you can consolidate all your spending that you might forget by the end of the day...or have lost receipts for.

There's no need to do this all the time.

But when you're trying to hold yourself accountable for your spending and trying to figure out where all that money goes...this helps.

Identify the categories you tend to overspend in, and then work on that budget!!

Little tools like this can help a lot, if you use them!

United Credit Source goes out of its way to find ways to help you manage your money.

Let us help you!

We're most than just credit repair.

We're your financial watchdog and mentor.

5 Reasons Why You Might Want Good Credit

Having a bad credit score closes many doors, whereas good credit helps with more than just getting a credit card or a loan. Here are some big reasons why it's important to have good credit.

1. Shelter - Mortgage Lenders will either deny you a loan to buy a home...or approve you, but with a higher cost. If you're not interested in buying, you need to know that credit is used for rental decisions as well. Landlords can deny your lease if you're a risky choice.

2. Transportation - You need a loan to get a car. What interest rate you qualify for is directly dependent on your credit.

3. Employment - Potential employers run credit checks during hiring oftentimes. If you have too much debt, you might not be a good candidate for the salary offered.

4. Business - If you have dreams of starting your own business, you usually need to be approved for a loan to get the start up cots covered.

5. Utilities - Electric, cable, telephone, water and cell phone companies do check to see if you have a good credit history. Have you been responsible paying utilities in your past?

You can run, but you can't hide from your past credit history. Go ahead and start making changes now, so that when the times comes, you can qualify for what you need. United Credit Source can help you understand your credit report and help you make the decision how to proceed in your best interests. Don't despair, we'll guide you through this second chance.

The Credit Card Trap

Credit cards can work for you, or against you.

If you're sick of credit cards or have been treated badly by a credit card company, you're likely to want to close that account. While that may seem like the best answer, it's really not. Because closing a line of credit lowers your credit score, which in turn can make it more difficult to get a loan or new credit card.

You could pay the balance and just stop using the card. That way the open line of credit works in your favor without any debt piling on. However, some credit card companies are adding annual fees and inactivity fees, which can ruin that plan.

What it comes down to is knowing your credit to debt ratio. How much outstanding debt do you have in relation to the amount of available credit? The more debt you have, the lower your credit scores, the more risky you appear to other lenders. In the wake of the credit crisis, lenders are paying more attention to credit scores than ever.

Feel like you don't understand what's going on? Need someone to help explain your credit report? United Credit Source helps with all of that. We're walk you through the credit repair process, talk you through understanding your credit report, and help you figure out the best strategy for your credit profile, depending on your goals.

Money & Your Marriage

Money problems are one of the largest reasons couples split up or divorce.

When you or your spouse is in a rough spot over money, communication is the key. It's really hard to admit you've made a mistake or that big changes need to be made. But if you wait too long, matters can spiral out of control.

Turn off the TV, step away from the computer, put down your phone, and sit down and talk with your significant over. Put everything out there. Be completely open and honest. Only together can you truly work to solve a problem.

A hugely helpful tool to solving money isues is to make up a budget. Yes, the B word. It doesn't have to be huge and scary. You can use an online budgeting tool to help you or just grab a piece of paper and write down how much you earn in a month. Then write down every expense you have, including bills, groceries, clothing, insurance, credit & debt,etc. Once you see how much money is coming in versus how much money is going out...well, adjustments will need to be made. But you can do it, and you can do it together.

Get your financial situation under control before it gets too large and out of control...

and before it hurts your marriage irrevocably.

Loan Modifications

Starting June 1, 2010, home owners applying for mortgage modifications will have to provide paperwork upfront to prove they qualify. They will need the following documentation:

1. Two pay stubs

2. An electronic form that allows a servicer to pull up a tax return online

3. A request for modification that includes a hardship affidavit.

The goal of this new process is to decrease time delays and increase the success rate of turning trial modifications into permanent modifications. Around 66,000 homeowners have accepted offers to change from trials to permanent modification programs.

This new program applies to borrowers who live in their homes and whose housing debt expenses are more than 31% of their income. Simplfying the process should make things easier overall.

Under modifications, intrest rates are reduced, then terms of the loan are extended. Homeowners usually have to complete the trial of three months of making payments on time, and then they can enter the permanent phase.

United Credit Source can help you clean up your credit report and help you better qualify for programs like this.

Do you know your rights?

The Fair Credit Reporting Actwas passed in the United States originally in 1970 to regulate collection, distribution, and use of consumer credit information. It is enforced by the US Federal Trade Commission.






Under this act, credit bureaus, such as Experian, Equifax and Transunion, have certain responsibilities:






1. They must provide a consumer with the information about him or her in their files and verify the accuracy of that info.




2. Negative info that has been disputed and removed may not be reinserted without notifying the consumer in writing within five days.




3. The Credit Bureaus may not keep negative info for an excessive period, such as more than seven years for late payments, collections or judgments. The only exceptions are bankruptcies (10 years) and tax liens (seven years from when they were paid).




Also under this act, information furnishers, such as credit card companies, collection agencies, auto financers or mortgage lenders, may only report to a consumer's credit as long as:




1. They provide complete and accurate information.




2. They must investigate disputed info and must respond within 30 days of notice of a dispute.




3. They must inform consumers of negative info that has been or is about to be placed on their credit report within 30 days.






It's important to be proactive in your own life and credit. Let United Credit Source educate you in the restoration process on how credit works as well as gaining a better understanding of your rights. We want to help you regain control of your finances, so that you can live the best quality life there is to offer.

More Bad news About Americans' Debt

Posted originally at Walletpop.com

Jan 5th 2010 by Martha C. White

For a while, it looked as if Americans were getting a better grip on their out-of-control credit card habits. Unfortunately, new data shows that we seem to be falling off the wagon once again.

According to this article in the Wall Street Journal, the rate of credit card charge-offs rose in November from 10% to 10.6% after declining for the past two months, and delinquencies continued a four-month rise, hitting 6.2% in November. Delinquencies are payments that are 30 days or more past due. Charge-offs are balances that the card company writes off as a loss and gives up on (generally, they sell the debt for pennies on the dollar to a third-party debt collector).

Moody's predicts that the charge-off rate will continue rising and eventually peak in the middle of this year. In other words, it's going to get worse before it gets better.

Even more worrisome is data that shows Americans are paying down less of their collective principal than they were just recently. The payment rate fell nearly a full percentage point in November to 16.42%.

This is bad news for delinquent cardholders individually; it's also bad for the economy as a whole. While experts have recently mentioned some encouraging signs like lower unemployment claim filings and small growth in the manufacturing sector, this recovery still has a long way to go.

High rates of unpaid credit card debt affect both consumer spending ability and consumer confidence. Both of these, in turn, directly affect the unemployment rate, since companies won't hire people to make goods or staff stores if they perceive that spending is under siege.

If this sounds like a vicious cycle, it is. While we here at Walletpop hear on a regular basis from readers who have sworn off credit card balances and stick to buying only what they can pay for at the time, there are obviously many Americans still stuck in a downward spiral of debt. Until enough people can get out from under those crushing bills, this debt is going to drag on the nation's economic recovery.